One of the most important concepts within risk management is risk tolerance. Without clearly defining risk tolerance it is virtually impossible to implement good risk management, since we do not know what to measure risk against. Defining risk tolerance means to define how much risk the business can live with. Risk tolerance is vitally important […]

Edge, which every year invites scientists, philosophers, writers, thinkers and artists to opine on a major question of the moment, asked this year: “What scientific concept would improve everybody’s cognitive toolkit?”

In our world ‘the best possible analysis’ means that we have a model ‘good enough’ to describe the business under study. The question then is – do we need to take into account the uncertainties that always will be inherent in its operations and markets? And if we have to, is it possible?

Most companies have some sort of model describing the company’s operations. They are mostly used for budgeting, but in some cases also for forecasting cash flow and other important performance measures.